JD.com uses automated vans to deliver goods
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JD.com uses automated vans to deliver goods

JD.com, the Chinese ecommerce giant that sits in the number two spot in online retail, second only to juggernaut Alibaba, is experimenting with new ways to get its packages delivered. In the midst of “worsening labour shortages” (according to the Nikkei Asian Review) the company has expanded a 2018 strategy that uses autonomous vehicles to get its goods where they need to go. News broke this week that the company’s artificially intelligent delivery service is now available in more-than ten cities.

JD.com’s share price has appreciated by 41% so far this year

JD July 19

Source: Yahoo Finance

JD.com’s robotic vehicles, which are operating in major Chinese cities like Beijing, Tianjin, Shanghai, and Chongqing, rely on cameras and sensors which monitor their surroundings, ensuring that they don’t collide with obstacles and get safely to their destinations. The company has authorisation from local governments to operate the vans, and uses text message to tell customers when they’ll be arriving. Armed with a unique passcode (also delivered via text) customers are then able to unlock the van with via a touchpad and retrieve their packages from inside.

JD’s new vehicles are a step towards what is likely to be remembered as an age of automation. The company is looking to leverage new tech in a bid to eliminate the fallibility, cost, and difficulty of employing human workers in this part of their business. That doesn’t mean humans will ever be obsolete – but for some roles, the one-time expenditure on a piece of top-quality tech comes in at far less than a lifetime’s worth of wages. Add to that greater efficiency, and we can expect to see more automated delivery services popping up. Already, Amazon is discussing automated drone deliveries, and Domino’s Pizza has trialled numerous automated vehicles to get its pizzas to their destinations.

JD has made no secret of the fact that it is planning to add to this network of vehicles. Justifying that decision, a spokesperson recently told the media: “unmanned services are more efficient than staffed stored and are more convenient for customers.” In the long run, they’re cheaper, too.

Disclosure

Dominion holds JD.com in its Global Trends Ecommerce Fund.


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